WHY EVERY MAJOR WALL STREET FIRM IS BULLISH AND WE’RE NOT
There is not a single firm that measures risk as we do. As you know, we have been bearish on stocks for the good part of a year. Even when stocks were reaching new post-credit crisis highs, we did not bulge.
Why?
Because every firm measures risk using the same old, worn-out, models that base risk off of volatility or non-distributable earnings.
We measure risk using the most important factors to a business. Items including sales growth, sales volatility, cash burn, credit spreads, ability to roll over debt, foreign risk, insurance, possible loss of a patent or key executive, taxes, and over 60 other variables.
Everything we do is more intensive.
From how we define free cash flow which includes excess expenditures to invested capital which is based off of our proprietary free cash flow.
Maybe you would benefit from learning these credit and cash flow methods?
If you are interested in becoming a better securities analyst, pre-order “Security Valuation and Risk Analysis” available at all online book outlets.
